The General Statistics Office said that growth in the manufacturing sector slowed to 7.4% compared with last year’s 11.4% while power generation and distribution increased by 8.4%, down 0.9 percentage point from a year earlier.
Mining and quarrying shrank by 3.7%, compared with a decline of 3.5% in the first two months of 2019.
At a recent conference, Director of the Vietnam Industrial Agency Truong Thanh Hoai said that Vietnam’s manufacturing industry is heavily reliant on input materials and parts imported from China, Japan and the Republic of Korea, which are being affected by the coronavirus outbreak.
One of the hardest hit sectors is the electronics industry, which imported US$40 billion worth of parts in 2019.
Hoai said electronics manufacturers only have sufficient materials for production until the middle or the end of March. Garment and footwear producers are also expected to face shortages of materials in March or April.
The first two months of 2020 also saw a slowdown in the growth of retail sales and service revenue, which increased at the slowest pace in the past six years at 5.4%, with price increases excluded.
Last year’s growth figure was 9.3%, the General Statistics Office said.
Retail sales grew by 9.8%, down from the 13.3% recorded in the first two months of 2019, as consumers curtailed their shopping at public spaces to avoid the coronavirus.
Virus fears also hurt accommodation and tourism services, which rose by a respective 1.7% and 1.1% nationwide, with some provinces and cities recording sharp falls, such as Hanoi, Khanh Hoa and Lam Dong.
